Stocks mixed ahead of Fed rates decision

NEW YORK » Investors put off major decisions yesterday, leaving stocks mixed as Wall Street awaited the results of the first Federal Reserve rate-setting meeting chaired by Ben Bernanke.

"We've had a pretty good run here in anticipation that the Fed is nearly done raising interest rates," said Mark Vitner, senior economist with Wachovia Corp. in Charlotte, N.C. "But we have a real unknown quantity in Ben Bernanke ... so everyone is on Fed watch."

The Fed Open Market Committee under Bernanke is widely expected to follow the policy of former Chairman Alan Greenspan and announce a rate increase at the end of its two-day meeting on today. That would boost short-term rates one-quarter point to 4.75 percent.

The Dow Jones industrial average slid 29.86, or 0.3 percent, to 11,250.11.

Broader stock indicators were mixed. The Standard & Poor's 500 index, which seesawed through the day, ended down 1.34, or 0.1 percent, at 1,301.61. The Nasdaq composite index advanced 2.76, or 0.1 percent, to 2,315.58.

A similar stall pattern was apparent last week as the major indexes finished narrowly mixed. For the week, the Dow Jones industrials were flat, while the Standard & Poor's 500 fell 0.33 percent and the Nasdaq composite index gained 0.27 percent.

The Russell 2000 index of smaller companies inched up 0.20, or about flat, to 754.03.

Declining shares outpaced advancing shares by about 3-to-2 on the New York Stock Exchange, where consolidated volume came to 2.04 billion shares.

While the market widely expects the Fed to announce its 15th consecutive rate increase today, investors are more focused on clues to whether the Fed believes it has raised interest rates sufficiently to contain inflation.

Mark Donahoe, managing director and head of equity trading at Piper Jaffray in Minneapolis, said a lot of people were "sitting on the fence waiting for the Fed."

Traders also kept a close watch on crude oil prices, which slipped under $64 a barrel yesterday after the release of three foreign hostages by Nigerian militants eased concerns about supplies from the oil-rich African nation.

Yesterday, gasoline futures rose 0.56 cent to close at $1.8288 per gallon on the New York Mercantile Exchange, while light sweet crude futures fell 10 cents to settle at $64.16 per barrel.

Meanwhile, silver hit its highest price in nearly two decades, with the May silver contract hitting $10.94 an ounce yesterday on the New York Merc. It settled at $10.895 an ounce, up 16 cents. The momentum silver buying, apparently in anticipation of a silver exchange-traded fund, helped boost gold; the April gold contract settled at $567.40 and ounce, up $6.90.